THE LONG-RUN BEHAVIOR OF THE RELATIVE PRICE OF PRIMARY COMMODITIES - STATISTICAL EVIDENCE AND POLICY IMPLICATIONS

This paper is concerned with both the statistical and policy issues su rrounding the long-run behavior of the ratio of primary commodity pric es to those of manufactured goods, seen as a measure of the barter ter ms of trade between primary producers and the producers of manufacture rs. The statistical evidence reported is found to offer support for th e secular deterioration hypothesis. The policy implications of this fi nding for less-developed countries are explored.